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The Rising Price of a College Education

The Rising Price of a College Education. Sandy Baum Michael McPherson Skidmore College & The Spencer Foundation The College Board College Savings Foundation May 2008. Rising college prices: Not a new story.

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The Rising Price of a College Education

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  1. The Rising Price of a College Education Sandy Baum Michael McPherson Skidmore College & The Spencer Foundation The College Board College Savings Foundation May 2008

  2. Rising college prices:Not a new story

  3. Average Published Charges for Undergraduates, 2007-08 (Enrollment-Weighted) Source: The College Board, Trends in College Pricing 2007

  4. Average Published Tuition and Fees, Five-Year Intervals,1977-78 to 2007-08 (Enrollment-Weighted) Source: The College Board, Trends in College Pricing 2007

  5. Variation in Prices

  6. Distribution of Full-Time Undergraduates at Public & Private Four-Year Institutions by Published Tuition & Fees, 2007-08 Source: The College Board, Trends in College Pricing 2007

  7. Tuition & Fee and Room &Board Charges by Region & Sector, in Constant (2007) Dollars, 1997-98 and 2007-08 (Enrollment-Weighted) Source: The College Board, Trends in College Pricing 2007

  8. Tuition and fees don’t tell the whole story.

  9. Average Estimated Undergraduate Budgets, 2007-08(Enrollment-Weighted) Source: The College Board, Trends in College Pricing 2007

  10. The net price to students after considering grant aid and tax benefits, is a better indicator of affordability than the published price.

  11. Tuition & Fees, Net Tuition & Fees, and Room & Board in Constant (2007) Dollars: 1992-93 to 2007-08, Source: The College Board, Trends in College Pricing 2007

  12. Full-Time Dependent Student Net Tuition & Fees and Net Cost of Attendance:Percentage of Family Income, 1992-93 and 2003-04 Sources: NPSAS: 1993 and 2004; U.S. Census Bureau, Current Population Survey, Annual Social and Economic Supplement, 1992 and 2003; calculations by authors. The College Board, Trends in College Pricing 2007

  13. Full-Time Dependent Student Net Tuition & Fees and Net Cost of Attendance: Percentage of Family Income, 1992-93 and 2003-04 Sources:NPSAS: 1993 and 2004; U.S. Census Bureau, Current Population Survey, Annual Social and Economic Supplement, 1992 and 2003; calculations by authors. The College Board, Trends in College Pricing 2007

  14. What is driving the price of college?

  15. Annual Percentage Changes in Educational Appropriations per Public FTE Student and in Tuition & Fees at Public Four-Year Institutions in Constant (2007) Dollars, 1980-81 to 2005-06 Source: SHEEO data, The College Board, Trends in College Pricing 2007

  16. + Source: The Delta Cost Project, 2008 16

  17. + Source: The Delta Cost Project, 2008 17

  18. Prices, Revenue, Spending: % Change 1998-99 to 2004-05, in 2005 CPI Adjusted $ Measures of median spending per FTE student; Delta 19-year matched set. Source: The Delta Cost Project, 2008

  19. National Average Full Educational Cost per FTE at Public Institutions, 1998 and 2005 Full Educational Cost per FTE (2005 constant dollars) All measures are mean $/FTE, data source Delta database 19-year matched 19 Source: The Delta Cost Project, 2008

  20. National Average Full Educational Cost per FTE at Private Institutions, 1998 and 2005 All measures are mean $/FTE, data source Delta database 19-year matched Source: The Delta Cost Project, 2008

  21. How are students paying?

  22. Ten-Year Trend in Funds Used to Finance Postsecondary Education Expensesin Constant (2006) Dollars (in Billions), 1996-97 to 2006-07 Source: The College Board, Trends in Student Aid 2007

  23. Growth of Federal, Institutional, and State Grant Dollars in Constant (2006) Dollars (in Billions),1996-97 to 2006-07 Source: The College Board, Trends in Student Aid, 2007

  24. Growth of Stafford, PLUS, and Nonfederal Loan Dollarsin Constant (2006) Dollars (in Billions), 1996-97 to 2006-07 Source: The College Board, Trends in Student Aid, 2007

  25. Average Amount Borrowed (& Percent Borrowing) from Federal and Private Sources, Full-Time Dependent Undergraduates by Family Incomein Constant (2006) Dollars, 1992-93 to 2003-04 Sources: NPSAS: 1993, 1996, 2000, and 2004; calculations by authors. U.S. Census Bureau, Current Population Survey, Annual Social and Economic Supplement, 1992, 1995, 1999, and 2003. The College Board, Trends in Student Aid, 2007

  26. Is it worth it?

  27. Median Earnings and Tax Payments of Full-Time Year-Round Workers Ages 25 and Older, • by Education Level, 2005 Notes: Taxes paid include federal income, Social Security, and Medicare taxes, and state and local income, sales, and property taxes. Sources: U.S. Census Bureau, 2006, PINC-03; Internal Revenue Service, 2006; McIntyre et al., 2003; calculations by the authors. The College Board, Education Pays 2007

  28. Estimated Cumulative Earnings Net of Loan Repayment for Tuition and Fees, by Education Level Note:Based on median 2005 earnings for each education level at each age and discounted using a 3 percent annual rate. Earnings for bachelor’s degree recipients include only those with no advanced degree. Assumes tuition and fees are financed with borrowing, and loan payments are made for 10 years after graduation. Sources:U.S. Census Bureau, 2006, PINC-03, PINC-04; The College Board, 2005; calculations by the authors. The College Board, Education Pays 2007.

  29. What will the future bring?

  30. Key Variables: Ability to Pay Economic growth Income distribution Demographics

  31. Key Variables: Cost and Price Innovations in instruction Technical change University governance Government subsidies (state and federal)

  32. The Role of Saving Who can save? New saving vs. asset allocation Distribution of tax subsidies (deductions vs. credits)

  33. The Role of Loans Continued reliance Flexible repayment options Higher loan limits

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